What are non exempt assets?
3 attorney answers
A non-exempt asset is an asset that is subject to seizure by the trustee. Each state has a set of its own exemptions. If you believe your soon to be ex has assets that may allow your parents to recover a portion of the promissory note, you should urge them to consult with an experienced attorney in the state in which they live to review their options. If your soon to be ex does have non-exempt assets, the value of those assets will be disbursed to all of his creditors. It will be highly unlikely that your parents would recover all of the debt unless his asset to debt ratio is roughly even.
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I understand your concern but you are a bit confused on what you need to be done.
If you show there are assets, the big prize is your parents will get a share of what is left after paying taxes and other priority debts. This may be a lot of money, but this is the bare minimum.
Call the trustee and talk to them about what you believe is happening. If you are credible they will investigate and hopefully find assets (if they are hidden).
You could also file an adversary proceeding that would prevent your parents debt from being discharged.
This is a much better solution but it requires you prove fraud.
You need to speak with an attorney ASAP.
Please contact me directly with document for a free 30 minute consultation to get more concrete advice. This is not legal advice. I don't have enough information to give actual legal advice. I can only take the limited information presented and provide a framework to know how your situation may turn out. I may have questions that bring up issues you did not think were important but make a big difference.
Exemption laws vary widely from state to state, and an additional complication is if someone has moved into a new state, the law that applies in bankruptcy is the exemption from the former home, unless the person lives in the new state for at least two years.
Anything not specified on the state list of exempt property is non exempt. I am posting a link to a general description of exemptions for all 50 states, but it would be smart to directly review state law as well. The Bankruptcy Schedule C should set out what assets the person is claiming, and by seeing what is on Schedules A& B but not on Schedule C, you can see what is not exempt. Of course, an exemption may not be needed if the property is subject to a lien or financing that equals or exceeds the value of the property.
Hope this perspective helps!